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IN THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF VIRGINIA
Alexandria Division

UNITED STATES OF AMERICA,

v.

MIJA S. ROMER
(Counts 1, 3, 4, 5)

and

KHEM C. BATRA,
(Counts 1, 2, 5)

Defendants.

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Criminal No.: 96-00350-A-(1,2)

Count 1:
15 U.S.C. §1 (Bid Rigging)

Counts 2 and 3:
18 U.S.C. §§1341 and 2 (Mail Fraud)

Count 4:
18 U.S.C. §1344 (Bank Fraud)

Count 5:
18 U.S.C. §371 (Conspiracy)

Filed: [9/12/96]

INDICTMENT

September 1996 Term - At Alexandria, Virginia

COUNT ONE

THE GRAND JURY CHARGES THAT:

A. DEFENDANTS AND CO-CONSPIRATORS

1. At all times material to this Indictment, the
defendants, MIJA S. ROMER and KHEM C. BATRA, were real estate
speculators doing business in the Eastern District of Virginia.

2. Various firms and individuals, not made defendants in this
count, participated as co-conspirators in the offense charged and
performed acts and made statements in furtherance of it.

B. DESCRIPTION OF THE OFFENSE

3. Beginning at least as early as May 27, 1993 and
continuing through at least April 1995, the exact dates being
unknown to the grand jury, the defendants and others entered into
and engaged in a combination and conspiracy to limit the bidding
at certain public real estate auctions in the Eastern District of
Virginia. The combination and conspiracy unreasonably restrained
interstate trade and commerce in violation of Section 1 of the
Sherman Act (15 U.S.C. §1).

4. In certain instances when real estate located in the
Commonwealth of Virginia is sold, the sale is conducted by public
auction. When a deed of trust, commonly called a mortgage, is
foreclosed upon in the Commonwealth of Virginia, the property is
sold at a public auction in order to protect the interests of the
mortgage holder and the property owner.

5. When a mortgage is foreclosed, the mortgage holder
appoints a Trustee, pursuant to provisions in the original
mortgage documents, to conduct the sale of the property by public
auction. After required notice of an auction is given, the
Trustee holds the auction on the date and time specified.

6. The bidding at the public auction typically opens at
the amount owed by the property owner to the mortgage holder.
The Trustee who conducts the foreclosure auction seeks to obtain
the highest price possible at the public auction by soliciting
open and competitive bidding from potential purchasers. The
Trustee stops the bidding when the highest price reached by
competitive bidding is offered. The high bidder pays a deposit
to the Trustee in the form of a cashier's or certified check.
The Trustee then executes a Memorandum of Sale indicating the
property address, the date of the auction, the high bidder, the
high bid amount, and the amount of the deposit paid. The
Memorandum of Sale is needed by the high bidder in order to
complete the settlement of the property transaction, which
usually occurs within 15 days of the auction. Once the
settlement of the property transaction is completed, the high
bidder takes title to the property.

7. When a property is sold by public auction, any amount
paid for the property above the amount owed to the mortgage
holder(s) represents the property owner's equity in the property
and is paid to the property owner.

8. The charged combination and conspiracy consisted of a
continuing agreement, understanding, and concert of action among
the defendants and co-conspirators to rig bids, the substantial
terms of which were:

a) to suppress competition by refraining from full
competitive bidding at certain public real estate
auctions; and

b) to conduct second, secret auctions, open only to
members of the conspiracy, to rebid the properties
won at those public real estate auctions and to
make payoffs to one another in return for limiting the bidding at those public real estate
auctions.

C. MEANS AND METHODS OF THE CONSPIRACY

9. For the purpose of forming and carrying out the charged
combination and conspiracy, the defendants and co-conspirators
did those things that they combined and conspired to do,
including, among other things:

agreeing to limit competition with one another at
certain public real estate auctions, so that
certain public auction prices would be suppressed;

selecting a designated bidder to act for the
conspirators at certain public real estate
auctions, either at a private meeting prior to the
public auction or by various signals during the
public auction;

permitting the designated bidder to make bids to
seek to win the public real estate auction without
full competition from the co-conspirators;

purchasing auctioned property at prices lower than
would have resulted from a fully competitive
auction, thereby depriving property owners and
certain mortgage holders of the full value of the
auctioned property;

holding second, secret and private auctions, open
only to the co-conspirators and generally
conducted by written bid, in which the co-conspirators made bids to acquire each property at
prices higher than the price paid by the
designated bidder at the public real estate
auction;

awarding the property to the highest of the secret
auction bids, and agreeing to divide the group's
secret profit (the difference between the public
real estate auction price and the secret auction
price) by making payoffs among the conspirators;

arranging for the secret auction winner to take
title or ownership of the property; and

making the payoffs that they agreed to make.

10. In the manner described in paragraph 9, and for the
purpose of carrying out the charged combination and conspiracy,
the defendants and co-conspirators unreasonably restricted full
competitive bidding at auctions of the following properties,
among others, on or about the listed dates:

Property Address

Auction Date

9100

Arlington Blvd., Fairfax

May 27, 1993

9363

Peter Roy Ct., Burke

September 14, 1993

5114

Cliffhaven Dr., Annandale

November 9, 1993

6825

Lamp Post Ln., Alexandria

November 12, 1993

3058

Sugar Ln., Vienna

December 3, 1993

5522

Ventnor Ln., Springfield

March 22, 1994

5803

Royal Ridge Dr., # Q,
Springfield

March 22, 1994

7345

McWhorter Pl., Annandale

April 27, 1994

3530

Armfield Farm Dr., Chantilly

April 10, 1995

D. TRADE AND COMMERCE

11. The business activities of the defendants and co-conspirators that are the subject of this count were within the
flow of, and substantially affected, interstate trade and
commerce.

12. Foreclosure auctions held in the Eastern District of
Virginia regularly were advertised in newspapers that were
distributed in the District of Columbia and in Maryland.

13. Potential purchasers at public real estate auctions in
the Eastern District of Virginia traveled across state lines to
attend such auctions.

14. In a substantial number of instances when the
defendants or co-conspirators purchased a property at a public
real estate auction, persons, money, and documents moved across
state lines in order to settle the transaction.

E. JURISDICTION AND VENUE

15. The combination and conspiracy charged in this count
was formed in and carried out, in part, within the Eastern
District of Virginia, within the five years preceding the return
of this Indictment.

(In violation of Title 15, United States Code, Section 1.)

COUNT TWO

THE GRAND JURY FURTHER CHARGES THAT:

1. KHEM C. BATRA is hereby indicted and made a defendant
in this count.

2. During at least September and October 1993, the exact
dates being unknown to the grand jury, the defendant, KHEM C.
BATRA, and others, within the Eastern District of Virginia, as
part of an ongoing arrangement, did knowingly devise and intend
to devise a scheme and artifice to defraud and to obtain money
and property by means of false and fraudulent pretenses,
representations and promises from the mortgage holders and owners
of a property that was being sold at a public real estate auction
in the Eastern District of Virginia. That scheme and artifice to
defraud consisted of suppressing competition at the public
auction of a property at 9363 Peter Roy Court, Burke, VA, by
agreeing not to bid against one another at the public auction, by
acquiring the property at a lower price than would have resulted
from a fully competitive auction, and by holding a second, secret
auction and dividing the profits of the scheme (the difference
between the public auction price and the secret auction price)
among themselves.

3. On or about October 14, 1993, in the Eastern District
of Virginia, the defendant, KHEM C. BATRA, in connection with the
auction of a property at 9363 Peter Roy Court, Burke, VA, for the
purpose of executing the scheme and artifice described above and
attempting so to do, knowingly caused to be delivered by mail
according to the direction thereon, by the United States Postal
Service, an envelope addressed to Leo Gulley, 10907 Blue Roan
Road, Oakton, VA 22124, containing a payoff check.

(In violation of Title 18, United States Code, Sections 1341 and 2.)

COUNT THREE

THE GRAND JURY FURTHER CHARGES THAT:

1. MIJA S. ROMER is hereby indicted and made a defendant
in this count.

2. During at least December 1993, the exact dates being
unknown to the grand jury, the defendant, MIJA S. ROMER, and
others, within the Eastern District of Virginia, as part of an ongoing arrangement, did knowingly devise and intend to devise a
scheme and artifice to defraud and to obtain money and property
by means of false and fraudulent pretenses, representations and
promises from the owners of a property that was being sold at a
public real estate auction in the Eastern District of Virginia.
That scheme and artifice to defraud consisted of suppressing
competition at the public auction of a property at 3058 Sugar
Lane, Vienna, VA, by agreeing not to bid against one another at
the public auction, by acquiring the property at a lower price
than would have resulted from a fully competitive auction, and by
holding a second, secret auction and dividing the profits of the
scheme (the difference between the public auction price and the
secret auction price) among themselves.

3. On or about December 21, 1993, in the Eastern District
of Virginia, the defendant, MIJA S. ROMER, in connection with the
auction of a property at 3058 Sugar Lane, Vienna, VA, for the
purpose of executing the scheme and artifice described above and
attempting so to do, knowingly caused to be delivered by mail
according to the direction thereon, by the United States Postal
Service an envelope addressed to Leo Gulley, 10907 Blue Roan
Road, Oakton, VA 22124, containing a payoff check.

(In violation of Title 18, United States Code, Sections 1341 and 2.)

COUNT FOUR

THE GRAND JURY FURTHER CHARGES THAT:

1. MIJA S. ROMER is hereby indicted and made a defendant
in this count.

2. In or about October 1993, in the Eastern District of
Virginia and elsewhere, MIJA S. ROMER, the defendant, knowingly
executed and attempted to execute a scheme or artifice to defraud
a financial institution and to obtain money and credits owned by
and under the custody and control of a financial insitution by
means of false and fraudulent pretenses, representations and
promises.

3. Specifically, MIJA S. ROMER, in or about October 1993,
applied for a loan in the amount of $80,000 from Burke and
Herbert Bank and Trust Co., a bank the deposits of which were
then insured by the Federal Deposit Insurance Corporation. As
part of the loan application process, ROMER submitted a document
that purported to be a copy of her 1992 United States Individual
Income Tax Return, Form 1040.

4. That document was not a copy of her tax return filed
with the Internal Revenue Service because ROMER had not yet filed
an income tax return for 1992 at the time of her October 1993
loan application and because ROMER's 1992 income tax return,
filed in April 1995, was materially different.

5. On the 1992 United States Individual Income Tax Return,
Form 1040, that ROMER submitted to Burke and Herbert Bank and
Trust Co., ROMER reported no wages (line 7), dividend income
(line 9) of $4,030, business income (line 12) from Romer and
Associates of $74,220, and adjusted gross income (line 31) of
$81,666.

6. On the 1992 United States Individual Income Tax Return,
Form 1040, that ROMER filed with the IRS in April 1995, ROMER
reported wages (line 7) of $8,821, dividend income (line 9) of
$1,468, a business loss (line 12) from East West Realty, Inc., of
$571, and adjusted gross income (line 31) of negative $4,896.

(In violation of Title 18, United States Code, Section 1344.)

COUNT FIVE

THE GRAND JURY FURTHER CHARGES THAT:

1. MIJA S. ROMER and KHEM C. BATRA are hereby indicted and
made defendants in this count.

2. From on or about March 22, 1994, through at least

August 14, 1995, the exact dates being unknown to the grand jury,
in the Eastern District of Virginia, the defendants, MIJA S.
ROMER and KHEM C. BATRA, and others, unlawfully, knowingly and
willfully conspired and agreed to defraud the United States
Department of the Treasury, Internal Revenue Service, by
impeding, impairing, obstructing and defeating the lawful
functions of the IRS in the ascertainment, computation,
assessment and collection of taxes; specifically, by agreeing to
make illegal payoffs in cash rather than by check to avoid
reporting that cash as income on their tax returns.

A. MEANS AND METHODS OF THE CONSPIRACY

3. For the purpose of forming and carrying out the charged
combination and conspiracy, the defendants and co-conspirators
did those things that they combined and conspired to do,
including, among other things:

a) discussing and agreeing that secret, second
auction payoffs be made in cash rather than by
check;

b) making second auction payoffs in cash;

c) discussing and agreeing that cash payoffs would
not be reported on their income tax returns; and

d) discussing and agreeing that cash payoffs made by
the winner of the secret auction would not be
included in the secret auction winner's stated
cash basis in the property.

B. OVERT ACTS

4. In furtherance of the conspiracy and to effect the
objects thereof, the defendants and co-conspirators performed at
least one of the following overt acts in the Eastern District of
Virginia:

a) On or about March 22, 1994, ROMER made cash
payoffs to BATRA and other co-conspirators in
connection with rigging the bid at the auction of
the property at 5803 Royal Ridge Drive, Unit Q.

b) On or about May 27, 1994, ROMER and BATRA received
cash payoffs from a co-conspirator in connection
with rigging the bid at the auction of the
property at 7345 McWhorter Place, #111.

c) On or about August 14, 1995, BATRA caused to be
prepared a false document, United States
Individual Income Tax Return Form 1040, for BATRA
for 1994.

d) On or around August 14, 1995, BATRA caused a copy
of that false United States Individual Income Tax
Return Form 1040 for 1994 to be submitted to the
IRS.